WA house prices tipped to increase 15 per cent in 2021

Western Australian property pricesare expected to grow by 15 per cent this year, according to REIWAs revised2021 forecast.

REIWA President Damian Collins saidthe Institute was revising its 2021 forecast following the strong price growthexperienced in the first three months of 2021.

CoreLogics Perth home value indexshows prices have grown five per cent in the first three months of 2021. InNovember 2020 REIWA forecast prices in WA would increase asmuch as 10 per cent in 2021, however based on what we have seen in thefirst quarter of 2021, we now anticipate growth of 15 per cent by the end ofthe year.

There are a number of factors contributing to the strong price growthwe have seen and expect to continue to see this year. WA is still the mostaffordable state in the country when comparing income to median house prices.The current Perth median house sale price is $495,000, which is down from thepeak of $550,000 in 2014.

We hit the bottom of the market around June last year following theCOVID-19 lockdown and since then consumer confidence has returned. Buyers whowere waiting for the bottom to hit are now eager to get into the market andtake advantage of the record low interest rates.

“There is also a fundamental imbalance between supply and demand inthe sales market right now, with more buyers looking for property than thereare houses listed for sale. Buyers must act quickly and in competition with oneanother to secure a property, which is driving up house prices.

When you factor all these components in, it is a perfect storm for higher-than-expectedhouse price growth this year. We need to get more homes and apartments built.Until we see supply catch up with demand, we will see prices continue to rise,”Mr Collins said.

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